Singapore's Record GDP Fall Is 'canary In Coal Mine'
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2020-03-26 HKT 13:32
Singapore's economy suffered its biggest contraction since the financial crisis during the first quarter as the coronavirus pandemic escalated, data showed on Thursday, an ominous sign of the devastation being inflicted on the global economy.
The export-reliant financial hub is now heading for a deep recession this year after shrinking 2.2 percent on-year in January-March.
"Covid-19 is like an economic tsunami hitting Singapore's shores,” said Selena Ling, head of research and strategy at the city-state's OCBC Bank.
Singapore is one of the first economies to report growth data since the virus outbreak began, and the dismal figures add to signs the world is heading for a deep, painful recession with more than three billion people now under lockdown.
Markets have been in a tailspin as the pandemic accelerates, with more than 20,000 deaths reported worldwide, and all eyes are on data to be released in the US later on Thursday expected to show a surge in people applying for jobless benefits.
The Singapore economy's 2.2 percent contraction was the worst quarterly, on-year figure since 2009 during the financial crisis, the last time the city-state was plunged into recession.
Compared with the previous quarter, GDP fell 10.6 percent, as all sectors of the economy were battered, according to advance estimates released by the trade ministry.
Singapore's latest growth data "is like the canary in the mineshaft, and warns of further economic pain to come for other Asian economies", said OCBC Bank's Ling.
The trade ministry further lowered its GDP forecast for this year, and said it expects the economy to shrink between 1.0 and 4.0 percent.
"As the global Covid-19 situation is still evolving rapidly, there remains a significant degree of uncertainty over the severity and duration of the global outbreak, and the trajectory of the global economic recovery once the outbreak has been contained," the ministry said.
"The balance of risks, however, is tilted to the downside."
Even before the virus outbreak, Singapore's economy was already being hammered by the US-China trade war. (AFP)
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